BILL NUMBER: SB 1119	CHAPTERED  10/10/99

	CHAPTER   756
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 7, 1999
	PASSED THE SENATE   SEPTEMBER 7, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 1, 1999
	AMENDED IN ASSEMBLY   AUGUST 31, 1999
	AMENDED IN ASSEMBLY   AUGUST 18, 1999
	AMENDED IN ASSEMBLY   AUGUST 16, 1999
	AMENDED IN SENATE   APRIL 14, 1999

INTRODUCED BY   Senator Alarcon
   (Coauthor:  Assembly Member Romero)

                        FEBRUARY 26, 1999

   An act to amend Sections 44508, 44535, and 44559.1 of, and to add
Section 44559.8 to, the Health and Safety Code, relating to pollution
control financing, and declaring the urgency thereof, to take effect
immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1119, Alarcon.  Pollution control:  financing:  capital access.

   (1) The existing California Pollution Control Financing Authority
Act establishes the California Pollution Control Financing Authority,
with specified powers and duties, and authorizes the authority to
approve financing for projects, as defined, to prevent or reduce
environmental pollution, including projects to remediate
environmental pollution, and projects for soil excavation and
removal, and construction, operation, and maintenance of systems that
extract, contain, or treat groundwater, soil vapor, gas, or
leachate.
   This bill would expressly include, as an eligible project, payment
of the cost to remediate environmental pollution by a de minimis or
de micromis responsible party, in accordance with the federal
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 (CERCLA).  The bill would revise the definition of "project"
for purposes of the act to conform with these provisions.
   (2) The existing act establishes the California Pollution Control
Financing Authority to provide financial assistance for pollution
control facilities.  Existing law establishes the Capital Access Loan
Program, which is administered by the authority, and defines the
term "financial institution," for purposes of that program, as a
federal or state-chartered bank, savings association, credit union,
or a consortium of these entities.  Existing law provides, for the
purpose of the definition of the term "qualified loan," that the loan
may be made in the form of a line of credit, in which case the
amount of the loan is required to be considered as the maximum amount
that can be drawn against the line of credit.
   This bill would revise the definition of the term financial
institution to include not-for-profit community development financial
institutions and would specify that a consortium of financial
institutions may include a nonfinancial corporation, if the
percentage of capitalization by all nonfinancial corporations in the
consortium does not exceed 49%.  The bill would instead require a
participating financial institution to specify the amount of the line
of credit to be covered under the program, which may be equal to the
maximum commitment under the line of credit or be an amount less
than that maximum commitment.
   This bill would additionally authorize the authority to take
specified actions to facilitate the development of a secondary market
for a loan enrolled in the program by providing security for that
loan.
   (3) The bill would declare that it is to take effect immediately
as an urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 44508 of the Health and Safety Code is amended
to read:
   44508.  (a) "Project" and "pollution control facility,"
respectively, mean any land, building, improvement thereto, work,
property or structure, real or personal, providing or designed to
provide for the control, reduction, abatement, elimination,
remediation, or prevention of pollution, including, but not limited
to, hydrostatic control facilities, dust collectors, smoke bags,
settling ponds, filtration plants, sewage disposal facilities,
garbage disposal facilities, recycling facilities, dumps, filling
grounds, chlorination ponds, treatment works, water utility property,
soil excavation and removal, construction, operation, and
maintenance of systems that extract, contain, or treat groundwater,
soil vapor, gas, or leachate, and all other structures, systems, or
facilities now or hereafter developed or useful in the control of
pollution of any type or character, including any structure,
equipment, or other facilities for the purpose of the purchase,
production, distribution, or sale of water, or of reducing, treating,
neutralizing, or cooling the temperature of any liquid, gaseous, or
solid or hazardous waste substance or discharge resulting from the
process of manufacture, industry, or commerce, or from the
development, processing, or recovery of any natural resource or the
generation of electricity, steam heat, or manufactured gas, together
with the recovery, treatment, neutralizing, stabilizing, or cooling
equipment, facilities, plants, or structures necessary to reduce,
control, remediate, or eliminate pollution, and any and all
facilities which may hereafter be developed through science, study,
and investigation to aid and assist in the control of pollution or
the removal or treatment of any substance that might otherwise cause
or contribute to pollution, and including the use of renewable energy
resource devices or the development of an energy conservation
program where that action is designed to reduce onsite emissions or
pollutants.
   (b) "Project" also means payment by a party for the party's share
of the cost of remediation of pollution at a contaminated site for
which the party is a de minimis or de micromis responsible party, and
the party has been accorded that status in an expedited final
settlement or other settlement with the United States Environmental
Protection Agency, reached in accordance with subsection (g) of
Section 122 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Sec. 9601 et seq.)
and the regulations and guidance issued by the United States
Environmental Protection Agency pursuant to that act.
  SEC. 2.  Section 44535 of the Health and Safety Code is amended to
read:
   44535.  (a) The authority may separately approve financing for
projects, the purpose of which is to prevent, remediate, or reduce
environmental pollution resulting from the disposal of solid,
hazardous, or liquid waste.
   (b) The following projects shall be considered for financing:
   (1) Projects utilizing recognized resource recovery or energy
conversion processes.
   (2) Projects utilizing new technologies or processes for resource
recovery or energy conversion.
   (3) Projects utilizing technologies designed to reduce the level
of pollutants found in water.
   (4) Recycled water facilities.
   (5) Water main replacements.
   (6) Water filtration facilities.
   (7) Projects for the disposal of agricultural wastes.
   (8) Soil excavation and removal, and construction, operation, and
maintenance of systems that extract, contain, or treat groundwater,
soil vapor, gas, or leachate.
   (9) Other projects for the reduction or remediation of
environmental pollution resulting from the disposal of solid,
hazardous, or liquid waste, including, but not limited to, payment of
the cost to remediate environmental pollution by a party that is a
de minimis responsible party, in accordance with the standards for an
expedited final settlement specified in subdivision (g) of Section
9622 of Title 42 of the United States Code, or a de micromis
responsible party, under the regulations adopted by the Environmental
Protection Agency pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C. Sec.
9601 et seq.).
   (c) The projects specified in subdivision (b) may include elements
that provide for new refuse removal vehicles, transfer stations,
resource recovery or energy conversion plants, source separation, or
any solid or liquid waste disposal facilities involved in resource
recovery systems.  "Solid, hazardous, or liquid waste disposal
facilities" means any property, or portion thereof, used for the
collection, storage, treatment, utilization, processing, or final
disposal of solid, hazardous, or liquid waste in resource recovery
systems.
  SEC. 3.  Section 44559.1 of the Health and Safety Code is amended
to read:
   44559.1.  As used in this article, unless the context requires
otherwise:
   (a) "Authority" means the California Pollution Control Financing
Authority.
   (b) "California Capital Access Fund" means a fund created within
the authority to be used for purposes of the program.
   (c) "Executive director" means the Executive Director of the
California Pollution Control Financing Authority.
   (d) "Financial institution" means a federal or state-chartered
bank, savings association, credit union, not-for-profit community
development financial institution certified under Part 1805
(commencing with Section 1805.100) of Chapter XVIII of Title 12 of
the Code of Federal Regulations, or a consortium of these entities. A
consortium of those entities may include a nonfinancial corporation,
if the percentage of capitalization by all nonfinancial corporations
in the consortium does not exceed 49 percent.
   (e) "Loss reserve account" means an account in the State Treasury
or any financial institution that is established and maintained by
the authority for the benefit of a financial institution
participating in the Capital Access Loan Program established pursuant
to this article for the purpose of the following:
   (1) Depositing all required fees paid by the participating
financial institution and the qualified business.
   (2) Depositing contributions made by the state and, if applicable,
the federal government or other sources.
   (3) Covering losses on enrolled qualified loans sustained by the
participating financial institution by disbursing funds accumulated
in the loss reserve account.
   (f) "Participating financial institution" means a financial
institution that has been approved by the authority to enroll
qualified loans in the program and has agreed to all terms and
conditions set forth in this article and as may be required by any
applicable federal law providing matching funding.
   (g) "Passive real estate ownership" means ownership of real estate
for the purpose of deriving income from speculation, trade, or
rental, but does not include any of the following:
   (1) The ownership of that portion of real estate being used or
intended to be used for the operation of the business of the owner of
the real estate.
   (2) The ownership of real estate for the purpose of construction
or renovation, until the completion of the construction or renovation
phase.
   (h) "Program" means the Capital Access Loan Program created
pursuant to this article.
   (i) "Qualified business" means a small business concern that meets
both of the following criteria:
   (1) It is a corporation, partnership, cooperative, or other
entity, whether that entity is a nonprofit entity or an entity
established for profit, that is authorized to conduct business in the
state.
   (2) It has its primary business location within the boundaries of
the state.
   (j) (1) "Qualified loan" means a loan or a portion of a loan made
by a participating financial institution to a qualified business for
any business activity that has its primary economic effect in
California.  A qualified loan may be made in the form of a line of
credit, in which case the participating financial institution shall
specify the amount of the line of credit to be covered under the
program, which may be equal to the maximum commitment under the line
of credit or an amount that is less than that maximum commitment.  A
qualified loan made under the program may be made with the interest
rates, fees, and other terms and conditions agreed upon by the
participating financial institution and the borrower.
   (2) "Qualified loan" does not include any of the following:
   (A) A loan for the construction or purchase of residential
housing.
   (B) A loan to finance passive real estate ownership.
   (C) A loan for the refinancing of an existing loan when and to the
extent that the outstanding balance is not increased.
   (D) A loan, the proceeds of which will be used in any manner that
could cause the interest on any bonds previously issued by the
authority to become subject to federal income tax.
   (k) "Severely affected community" means any area classified as an
enterprise zone pursuant to the Enterprise Zone Act (Chapter 12.8
(commencing with Section 7070) of Division 7 of Title 1 of the
Government Code), any area, as designated by the executive director,
contiguous to the boundaries of a military base designated for
closure pursuant to Section 2687 of Title 10 of the United States
Code, as amended, and any other comparable economically distressed
geographic area so designated by the executive director from time to
time.
   (l) "Small Business Assistance Fund" means a fund created within
the authority that may only be used to pay the authority's
contribution to a loss reserve account for a qualified small business
that has operations that affect the environment.
   (m) "Small business concern" has the same meaning as in Section
632 of Title 15 of the United States Code, or as otherwise provided
in regulations of the authority.
  SEC. 4.  Section 44559.8 is added to the Health and Safety Code, to
read:
   44559.8.  Notwithstanding this article, the authority may
facilitate the development of a secondary market for a loan enrolled
in the capital access loan program by providing security for that
loan, thereby increasing participation in the program by financial
institutions and improving access to capital for small businesses.
For purposes of this section, the actions that the authority may take
include, but are not necessarily limited to, assigning all, or a
portion of, any loss reserve account to any other entity in
connection with providing security for a loan, including a trustee of
a securitization trust, transferring an enrolled loan from a
participating financial institution to a securitization trust, and
assisting underwriters in marketing a loan to the secondary market.
  SEC. 5.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order to allow the California Pollution Control Financing
Authority to issue revenue bonds on behalf of certain responsible
parties, before their federal obligations become due, thereby
facilitating response actions to hazardous substance releases as soon
as possible, and to increase access to capital for small businesses
for financing pollution control facilities, thereby protecting the
environment and furthering public health and safety as soon as
possible, it is necessary that this act take effect immediately.
